Senior Editor

Jerry Siebenmark

With turbine engine overhauls costing $800,000 or more, some owners and operators of legacy business jets are finding it difficult to justify the expense. At those prices, the value of their aircraft might not be worth the expense, even if their airframes still have a couple of hundred flight hours of life remaining in them.

 


It’s among that group that MRO providers and engine OEMs are finding a growing market for cheaper alternatives to overhauls through engine leases, exchanges, or purchases of used engines that haven’t yet reached their time for an overhaul.

 


Pratt &amp; Whitney (P&amp;W) began a little more than a year ago offering a spare engine program to the regional airline market for just that reason. This year, it has extended the program to include different leasing options for the business aviation, general aviation, helicopter, and APU markets.

 


“We are realizing in the other spaces, especially general aviation and the helicopter markets, there’s been a huge demand for leased engines,” Nicole Kappos, P&amp;W’s associate director of business development for aftermarket services, told AIN. “And one of the reasons why is what it allows the operator to do is basically maximize their return on their investment, hold on to their cash. Where liquidity is today, given the current context, is very important. We have everything from cargo to EMS operators to business jet operators asking for [this].”

 


Different options of P&amp;W’s leasing program include an “on-wing” lease in which P&amp;W buys back the operator’s engine and leases another engine to them. The on-wing lease also allows operators to lease an engine for a period that’s aligned to the lifecycle of their aircraft. “[It] provides them with an engine for just the hours they need…and then they return the engine to us when the aircraft is no longer in use,” Kappos said. “So, the good news here is it allows the operator to align their costs with the operating horizon.”

 


Other options include a long-term lease that provides an engine for 12 months or more and another option that hasn’t yet been introduced to the market but will enable the operator to purchase the engine at the conclusion of the lease’s term. All of the leases cover scheduled maintenance including overhauls and hot section inspections. The leases also don’t require a minimum flight-hour requirement nor is there a core exchange requirement, she said. Also, leases of 12 months or longer provide the guarantee of “the most up-to-date” spare engine at all times, Kappos added. “Again, it’s all about providing customer value…that’s what we’re here for.”

 


The business aviation market was initially slow to respond to the program, but recently has seen rising interest in the on-wing lease option among operators of older business jets such as the Learjet 60, Kappos said. “They’re nearing more of a mature engine…that’s where we’re seeing more of a demand.”

 


<h2>StandardAero Offers Engine Exchange</h2>

 


Earlier this year, MRO provider StandardAero launched an engine exchange program aimed in part at providing owners and operators a less costly option to a complete engine overhaul. The Scottsdale, Arizona-based MRO provider’s engine exchange program lets aircraft owners exchange their engines or purchase replacement engines with less flight time to extend the life of their aircraft.

 


It currently applies to specific engine models—the Honeywell TFE731 and CFE738 and Pratt &amp; Whitney PW305—as well as Honeywell 36-100/150-series APUs, but it could be extended to include other engine models, depending on interest, the company said.

 


Rhyse Booth, leader of StandardAero’s engine exchange program, told AIN the company has seen “a big increase” in requests for spare engines. “Requests for Honeywell products are up roughly 40 percent,” Booth said. “The number of requests for non-Honeywell engine lines are up 75 percent. So, product that we weren’t offering previously is showing promise and presenting new opportunity.”

 


He added that the market for spare engines has been price-point competitive without any significant dips in overall prices. “We half expected to see engines liquidated at low prices in the Covid economy,” Booth said. “That hasn’t been the case.”

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